Estimated tax payment question:
I converted $30k of rollover 401k into a Roth IRA and have $26k of realized ST Capital Gains this year (Roth conversion in end of Q1 and most capital gains in Q2).
My total federal withholding tax last year was approximately $12k and this year I will have 40% more in reported income on my employer W2 and anticipate higher that $12k federal withholding for my new job. Given this, what is the best way to go about making est. tax payments for the income (continued.)

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Would your W-2 withholdings meet the 110% of prior year tax due safe harbor threshold? If so you don’t need to make estimated payments but would probably have tax due come filing next year.

I replied below. PY withholding isn’t irrelevant. It’s based on PY tax assessed on your 1040.

Income mentioned above? Is it best to use the safe harbor method and pay 100% of the amount of withholding tax I had withheld last year? Or considering that my reported W2 income will be substantially higher than last year (~90k last year and roughly 130k this year) I will thus already have federal tax withholdings that are 110% of last years due to the additional salary/bonus reported in the end of 2020. Any help here would be appreciated as I need to make estimated tax payments by next week. Not sure if I should pay the full estimated 24% on the roughly $56k in income, ~$12k fro Mehta was reported as federal tax withholdings on my 2019 W2, or another amount. Thanks!

Based on my withholdings YTD, I will surely have over $13k withheld for the year, most likely around $15k. On the abundance of caution, maybe it’s a good idea to make a small estimated payment now? I know ultimately if I make no payment now and I’m safe under safe harbor threshold, I’ll just settle it all come filing time.

I just rather not pay the money now, as it is currently better off in the market due to ongoing circumstances with Covid.

Op are you worried about penalties and interest or do you want to make estimated taxes now so there are no surprises when you file taxes?

Worried about penalties and interest. I’d rather not pay the money now as it’s more favorable to me at the moment trading in the market

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